Correlation Between Bausch Lomb and Maiden Holdings
Can any of the company-specific risk be diversified away by investing in both Bausch Lomb and Maiden Holdings at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Bausch Lomb and Maiden Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bausch Lomb Corp and Maiden Holdings, you can compare the effects of market volatilities on Bausch Lomb and Maiden Holdings and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Bausch Lomb with a short position of Maiden Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bausch Lomb and Maiden Holdings.
Diversification Opportunities for Bausch Lomb and Maiden Holdings
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Bausch and Maiden is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Bausch Lomb Corp and Maiden Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Maiden Holdings and Bausch Lomb is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Bausch Lomb Corp are associated (or correlated) with Maiden Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Maiden Holdings has no effect on the direction of Bausch Lomb i.e., Bausch Lomb and Maiden Holdings go up and down completely randomly.
Pair Corralation between Bausch Lomb and Maiden Holdings
Given the investment horizon of 90 days Bausch Lomb Corp is expected to generate 1.09 times more return on investment than Maiden Holdings. However, Bausch Lomb is 1.09 times more volatile than Maiden Holdings. It trades about 0.04 of its potential returns per unit of risk. Maiden Holdings is currently generating about -0.28 per unit of risk. If you would invest 2,045 in Bausch Lomb Corp on September 12, 2024 and sell it today you would earn a total of 20.00 from holding Bausch Lomb Corp or generate 0.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bausch Lomb Corp vs. Maiden Holdings
Performance |
| Timeline |
| Bausch Lomb Corp |
| Maiden Holdings |
Bausch Lomb and Maiden Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bausch Lomb and Maiden Holdings
The main advantage of trading using opposite Bausch Lomb and Maiden Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bausch Lomb position performs unexpectedly, Maiden Holdings can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Maiden Holdings will offset losses from the drop in Maiden Holdings' long position.| Bausch Lomb vs. The Cooper Companies, | Bausch Lomb vs. ICU Medical | Bausch Lomb vs. Hologic | Bausch Lomb vs. Becton Dickinson and |
| Maiden Holdings vs. Maiden Holdings North | Maiden Holdings vs. Reinsurance Group of | Maiden Holdings vs. Entergy Arkansas LLC | Maiden Holdings vs. Entergy New Orleans |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Equity Valuation module to check real value of public entities based on technical and fundamental data.
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